SpaceX's defense-focused Starshield satellite internet business lands first contract

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SpaceX won its first contract for Starshield, the defense-focused version of its Starlink satellite internet service, from the U.S. Space Force.

The one-year contract has a maximum value of $70 million, a U.S. Air Force representative told Bloomberg. The contract “provides for Starshield end-to-end service via the Starlink constellation, user terminals, ancillary equipment, network management and other related services,” the representative said. It was awarded on September 1.

SpaceX will be obligated $15 million by the end of this month, and the contract is expected to support over 50 mission partners across all arms of the U.S. military.

Satellite-based communications systems -- and Starlink in particular -- were thrown into the spotlight during the early months of Russia’s invasion of Ukraine, when SpaceX activated the service in Ukraine and sent large shipments of the Starlink terminals for use by civilians and the Ukrainian military.

But Starlink’s role in Ukrainian defense was contested, especially by SpaceX CEO Elon Musk himself. While Musk seemed to support sending Starlink terminals to the Ukrainian military at first, it was later revealed that he refused to activate the service when Ukraine requested it prior to a planned attack on Russia’s navy.

Starshield, announced last December, will hopefully clear up much of the ambiguity around using a commercial service in war operations. When the company announced Starshield, it noted on its website that the service “leverages SpaceX's Starlink technology and launch capability to support national security efforts,” though providing scant other details.

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Indeed, while SpaceX did not comment on the new contract, Musk posted on X that the division between Starlink and Starshield as serving civilian and defense customers respectively is “the right order of things.”

The U.S. Space Force has shown equal interest in boosting its satellite internet capacities. Starlink is likely especially attractive because it leverages a “proliferated” architecture of (what will eventually be) many thousands of satellites in low Earth orbit. Having so many assets in space, rather than a handful of exquisite satellites, means that the overall system is more resilient to attack by adversaries.